Key Insights:
- Galaxy Digital, Jump Crypto and Multicoin Capital are now planning to raise $1 billion for a Solana treasury.
- The plan involves building the largest reserve focused on Solana with Cantor Fitzgerald as lead banker.
- The Solana Foundation has shown support so far. A decision is expected as early as September.
Galaxy Digital is leading a massive effort to create a $1 billion Solana treasury, according to reports from Bloomberg.
The initiative, which is backed by Jump Crypto and Multicoin Capital, will create one of the largest reserves ever for a single altcoin.
If completed, this project would completely change how institutions approach Solana. It will also bolster confidence in the asset over the next few years.
The treasury is not designed for short-term trading. Instead, it is similar to traditional corporate treasury structures where assets are held for years on end.
Why the Solana Treasury Matters
A dedicated Solana treasury would give institutions exposure to SOL tokens and would strengthen liquidity across the market. Galaxy Digital, by pooling capital in this way, is attempting to stabilise trading cycles and support the availability of the token.
Solana has already made a name for itself in terms of defi. This is also true for areas like consumer applications and tokenised assets. Its cheap and fast transactions continue to attract developers and users, which means that a treasury of this scale could further improve its position as a major platform.
The Solana Foundation, which is headquartered in Zug, Switzerland, has announced that be a backer of the proposal, and the foundation itself supporting the initiative, is a major source of investor optimism.
Institutional Appetite for Solana
Institutional treasuries for cryptos like Solana are becoming a trend across the crypto industry. Ethereum-focused treasuries have already accumulated more than $20 billion worth of ETH.
This was one of the biggest contributors to Ethereum breaking its nearly four-year high.
This time around, Galaxy Digital and its partners are turning to Solana, and the same playbook could happen again.
These companies, by concentrating their reserves in SOL, will not only gain exposure to possible price appreciation but will also help to stabilise the ecosystem during times of volatility.
Solana is currently the sixth-largest cryptocurrency by market cap. It has also doubled in value since April, even though it still trades below its all-time high. This said, the possibility of such a large treasury accumulation could support its price if the demand continues upward.
What Are the Risks of a Solana Treasury
While the proposal shows a great deal of confidence in the asset, there are a few things to keep in mind.
Treasury-style accumulation directly ties company performance to the market. This means that if a downtrend occurs, large holders may be forced to sell. This would create even more downward pressure for the asset, and the cycle would repeat.
Critics have pointed out that similar strategies with Ethereum and Bitcoin have worried investors when it comes to market stability.
Galaxy CEO Michael Novogratz, for example, has warned that the environment for new treasury backers may be tougher than expected.
Still, the treasury strategy has been one of the most successful strategies for crypto adoption. It has also done much to create new corporate pathways into digital assets over the last few years.
What to Expect Ahead
The Solana treasury plan is expected to move forward quickly. A decision is expected to be finalised by September. If approved, the reserve would more than double the size of the largest existing Solana pool.
This comes amid a wave of interest in Solana-focused treasuries. Notably, Nasdaq-listed Mercurity Fintech Holding recently secured $200 million earlier this year for a similar strategy.
Classover Holding, on the other hand, announced a $550 million deal with Solana Growth Ventures. Both moves further show that institutional confidence has been on the rise in Solana’s future.
Galaxy Digital, Jump Crypto, and Multicoin Capital are now setting themselves up at the centre of this movement.
